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Revision Examination Tests
“Come all for this greatness”
...100% Correct Ans...
EXAM (ASSIGNMENT 01-04B) PRINCIPALS OF ECONOMICS 2 2024 -
DISTINCTION GUARANTEED 100%
01 Giovanni and Pedro make guitars. Their current rate of production is
2 guitars a week: each of them makes one guitar. How would production
most likely be affected if Pedro made the frets and tuning pegs on the
guitars, and Giovanni made the guitar bodies?
ans:>Production would be increased.
Explanation:
When workers specialize, each is likely to become more efficient at the
task each specializes in. As Giovanni and Pedro become more efficient
at the production of guitars, they will produce more per week. Workers
who specialize in certain tasks often learn to produce more quickly and
with higher quality. This pattern holds true for many workers, including
assembly line laborers who build cars, stylists who cut hair, and doctors
who perform heart surgery. In fact, specialized workers often know their
jobs well enough to suggest innovative ways to do their work faster and
better.
01 Which scenario below is an example of scarcity?
ans:>A factory has a large need for highly skilled workers, however the
majority of applicants do not have any work experience.
Explanation:
Because the factory has a demand for highly skilled workers, but none
exist in the area, there is a shortage of labor for these positions.
Because we are able to create diamonds in a lab, they are no longer
scarce. Similarly, fracking has increased the availability of natural gas
which has lowered energy prices because it is not viewed as a scarce
resource. There is no shortage of kittens in animal shelters.
,01 Microeconomics and macroeconomics are
______________________ on the overall subject of the economy.
ans:>complementary perspectives
Explanation:
Economics covers considerable ground. We can divide that ground into
two parts: Microeconomics focuses on the actions of individual agents
within the economy, like households, workers, and businesses.
Macroeconomics looks at the economy as a whole. It focuses on broad
issues such as growth of production, the number of unemployed people,
the inflationary increase in prices, government deficits, and levels of
exports and imports.
Microeconomics and macroeconomics are not separate subjects, but
rather complementary perspectives on the overall subject of the
economy.
01 The division of labor may also be referred to as human specialization.
Overall, it is beneficial to firms because it ____________.
ans:>increases output by enabling workers to take advantage of
differences in their skills
Explanation:
A group of workers, each specializing in certain tasks, can produce more
than the same number of workers who try to produce the entire good or
service by themselves. Specialization results in higher levels of output
because it allows workers to focus their labor where they have an
advantage and potentially learn to produce more quickly in their areas of
specialization.
01 A macroeconomist is _____________ with how new technology
influences economic growth in a developing country.
ans:>concerned
Explanation:
Macroeconomics is concerned with issues of growth, unemployment,
and inflation in economies in the aggregate.
01 Which of the following is not an example of scarcity?
ans:>Amanda can play a song as many times as she likes with no
additional cost to her.
Explanation:
,Scarcity means that human wants for goods, services and resources
exceed what is available. Amanda being able to play a song as many
times as she likes with no additional cost to her is not an example of
scarcity.
01 Identify one key takeaway from the Circular Flow Diagram.
ans:>There are no free exchanges between firms and households.
In a two-sector economy there are firms and households. Firms provide
households with goods and services. Households provide firms with
labor, land, capital, and entrepreneurship. Households do not receive
free goods or services from firms, and households do not provide firms
with free labor. Everything has a cost.
01 Choose the best option below that illustrates an example of scarcity.
ans:>The value for ivory has increased leading to an increase in the
poaching of African Elephants and a decrease in the African Elephant
population.
Explanation:
When we have limited availability of a given resource, we say that the
resource is in scarce supply. Elephants are becoming a scarce resource
due to the high demand for their tusks. They are killed by poachers that
are only interested in their tusks. The other options in the question are
examples of situations where scarcity is not present - the wolf population
has grown since reintroduction, there are a number of craft breweries in
Portland, and with generic drugs on the market, they are more readily
available.
01 True or false?Graphs are rarely used to express economic models.
ans:>False
Explanation
Graphs and mathematic equations are often used to express economic
models. However, models do not need to be expressed graphically or
mathematically to be valid.
01 Which type of an economy, typically agricultural, can be described as
where things are done in the same way as they have always been
done?
ans:>traditional economy
Explanation:
, Traditional economies organize their economic affairs the way they have
always done (i.e., tradition). Occupations stay in the family. Most families
are farmers who grow the crops using traditional methods. What you
produce is what you consume. Because tradition drives the way of life,
there is little economic progress or development.
01 Identify the two groups that do not interact in a circular flow diagram
for a two-sector economy.
ans:>Exporters
Importers
Explanation:
A circular flow diagram shows the interactions and flow of goods,
services, and money between households and businesses (or firms). In
a two-sector economy there are firms and households. Firms provide
households with goods and services. Households provide firms with
labor, land, capital, and entrepreneurship. Households do not receive
free goods or services from firms, and households do not provide firms
with free labor. Everything has a cost.
Economists call a simplified description of how two or more variables
interact with each other a _______.
ans:>theory
In economics, a theory is defined as a simplified description of how two
or more variables interact with each other. Economic theories strive to
solve real-world problems that are based on particular assumptions
about human behavior.
01 True or false?In market economies, economic decisions are
determined by market forces.
ans:>True
In market economies, economic decisions are determined by market
forces. In a market economy, decision-making is decentralized. Market
economies are based on private enterprise: the private individuals or
groups of private individuals own and operate the means of production
(resources and businesses). Businesses supply goods and services
based on demand. (In a command economy, by contrast, the
government owns resources and businesses.) Supply of goods and
services depends on what the demands are. A person's income is based
on his or her ability to convert resources (especially labor) into
something that society values. The more society values the person's
Revision Examination Tests
“Come all for this greatness”
...100% Correct Ans...
EXAM (ASSIGNMENT 01-04B) PRINCIPALS OF ECONOMICS 2 2024 -
DISTINCTION GUARANTEED 100%
01 Giovanni and Pedro make guitars. Their current rate of production is
2 guitars a week: each of them makes one guitar. How would production
most likely be affected if Pedro made the frets and tuning pegs on the
guitars, and Giovanni made the guitar bodies?
ans:>Production would be increased.
Explanation:
When workers specialize, each is likely to become more efficient at the
task each specializes in. As Giovanni and Pedro become more efficient
at the production of guitars, they will produce more per week. Workers
who specialize in certain tasks often learn to produce more quickly and
with higher quality. This pattern holds true for many workers, including
assembly line laborers who build cars, stylists who cut hair, and doctors
who perform heart surgery. In fact, specialized workers often know their
jobs well enough to suggest innovative ways to do their work faster and
better.
01 Which scenario below is an example of scarcity?
ans:>A factory has a large need for highly skilled workers, however the
majority of applicants do not have any work experience.
Explanation:
Because the factory has a demand for highly skilled workers, but none
exist in the area, there is a shortage of labor for these positions.
Because we are able to create diamonds in a lab, they are no longer
scarce. Similarly, fracking has increased the availability of natural gas
which has lowered energy prices because it is not viewed as a scarce
resource. There is no shortage of kittens in animal shelters.
,01 Microeconomics and macroeconomics are
______________________ on the overall subject of the economy.
ans:>complementary perspectives
Explanation:
Economics covers considerable ground. We can divide that ground into
two parts: Microeconomics focuses on the actions of individual agents
within the economy, like households, workers, and businesses.
Macroeconomics looks at the economy as a whole. It focuses on broad
issues such as growth of production, the number of unemployed people,
the inflationary increase in prices, government deficits, and levels of
exports and imports.
Microeconomics and macroeconomics are not separate subjects, but
rather complementary perspectives on the overall subject of the
economy.
01 The division of labor may also be referred to as human specialization.
Overall, it is beneficial to firms because it ____________.
ans:>increases output by enabling workers to take advantage of
differences in their skills
Explanation:
A group of workers, each specializing in certain tasks, can produce more
than the same number of workers who try to produce the entire good or
service by themselves. Specialization results in higher levels of output
because it allows workers to focus their labor where they have an
advantage and potentially learn to produce more quickly in their areas of
specialization.
01 A macroeconomist is _____________ with how new technology
influences economic growth in a developing country.
ans:>concerned
Explanation:
Macroeconomics is concerned with issues of growth, unemployment,
and inflation in economies in the aggregate.
01 Which of the following is not an example of scarcity?
ans:>Amanda can play a song as many times as she likes with no
additional cost to her.
Explanation:
,Scarcity means that human wants for goods, services and resources
exceed what is available. Amanda being able to play a song as many
times as she likes with no additional cost to her is not an example of
scarcity.
01 Identify one key takeaway from the Circular Flow Diagram.
ans:>There are no free exchanges between firms and households.
In a two-sector economy there are firms and households. Firms provide
households with goods and services. Households provide firms with
labor, land, capital, and entrepreneurship. Households do not receive
free goods or services from firms, and households do not provide firms
with free labor. Everything has a cost.
01 Choose the best option below that illustrates an example of scarcity.
ans:>The value for ivory has increased leading to an increase in the
poaching of African Elephants and a decrease in the African Elephant
population.
Explanation:
When we have limited availability of a given resource, we say that the
resource is in scarce supply. Elephants are becoming a scarce resource
due to the high demand for their tusks. They are killed by poachers that
are only interested in their tusks. The other options in the question are
examples of situations where scarcity is not present - the wolf population
has grown since reintroduction, there are a number of craft breweries in
Portland, and with generic drugs on the market, they are more readily
available.
01 True or false?Graphs are rarely used to express economic models.
ans:>False
Explanation
Graphs and mathematic equations are often used to express economic
models. However, models do not need to be expressed graphically or
mathematically to be valid.
01 Which type of an economy, typically agricultural, can be described as
where things are done in the same way as they have always been
done?
ans:>traditional economy
Explanation:
, Traditional economies organize their economic affairs the way they have
always done (i.e., tradition). Occupations stay in the family. Most families
are farmers who grow the crops using traditional methods. What you
produce is what you consume. Because tradition drives the way of life,
there is little economic progress or development.
01 Identify the two groups that do not interact in a circular flow diagram
for a two-sector economy.
ans:>Exporters
Importers
Explanation:
A circular flow diagram shows the interactions and flow of goods,
services, and money between households and businesses (or firms). In
a two-sector economy there are firms and households. Firms provide
households with goods and services. Households provide firms with
labor, land, capital, and entrepreneurship. Households do not receive
free goods or services from firms, and households do not provide firms
with free labor. Everything has a cost.
Economists call a simplified description of how two or more variables
interact with each other a _______.
ans:>theory
In economics, a theory is defined as a simplified description of how two
or more variables interact with each other. Economic theories strive to
solve real-world problems that are based on particular assumptions
about human behavior.
01 True or false?In market economies, economic decisions are
determined by market forces.
ans:>True
In market economies, economic decisions are determined by market
forces. In a market economy, decision-making is decentralized. Market
economies are based on private enterprise: the private individuals or
groups of private individuals own and operate the means of production
(resources and businesses). Businesses supply goods and services
based on demand. (In a command economy, by contrast, the
government owns resources and businesses.) Supply of goods and
services depends on what the demands are. A person's income is based
on his or her ability to convert resources (especially labor) into
something that society values. The more society values the person's
